Greenwashing: What Is The Guidance For Advertisers?

Introduction

The UK's Advertising Standards Authority (ASA) has published an update to its advertising guidance on misleading environmental claims and social responsibility (the Guidance). The updated Guidance aims to identify factors that make environmental claims in advertisements more likely or less likely to comply with the UK Code of Non-broadcast Advertising and UK Code of Broadcast Advertising (the Codes).

The Guidance affects both non-broadcast marketing communications in the UK (including online, on social media, in print and on posters) and broadcast marketing communications (such as on radio and television services).

The Guidance reflects the Competition and Markets Authority's Green Claims Code, a guide to help businesses understand how to communicate their green credentials (as discussed in our previous article: Climate greenwashing liability). It also draws on principles established by the recent rulings by the ASA involving advertisers breaching the Codes by making positive environmental claims that exaggerate the business's environmental credentials.

Practical Implications

The Guidance contains a new section 3.1 entitled "Claims about initiatives designed to reduce environmental impact", which illustrates how each rule in the Codes governing environmental claims may be applied.

Key updates

The Guidance presents the following ten key updates:

1. Unqualified claims - the environmental benefits of specific products should be avoided if the product name could be understood to relate to the business as a whole.
2. Claims regarding specific products - claims that relate narrowly to specific products should make this scope clear.
3. Balancing information - marketers should include balancing information about the business's significant ongoing contribution to emissions or other environmental harm, particularly in sectors in which consumers are less likely to be aware of the business's overall contribution to environmental harm.
4. Qualifying emissions claims - claims about steps being taken to reduce emissions should be qualified by information about the balance of current activities, current emissions, the pathway to reducing these, and the timeframe to achieve that goal.
5. Consumer interpretation - Marketers must consider consumers' likely interpretation of a claim, bearing in mind how knowledgeable the audience is likely to be.
6. Substantiating absolute claims – absolute environmental claims (such as "sustainable" or "environmentally friendly") need a high level of substantiation and proposed initiatives which have not yet delivered results are insufficient to substantiate such claims.
7. Historical impact - advertisements that present a business's negative environmental impact as being historical are likely to mislead consumers if the business is still creating a significant negative impact.
8. General claims - consumers are unlikely to know which businesses are improving their environmental performance and advertisements should not promote general positive environmental credentials without addressing this knowledge gap.
9. Net zero initiatives - specific initiatives to achieve net zero should be clearly contextualised with information about the role that the initiative would play in that net zero plan, and how and when net zero emissions will be achieved.
10. Misleading impression - referencing lower carbon activities and their contribution to the energy transition, alongside general brand logos and environmental claims, can create a misleading impression when a business' overall impact on the environment is harmful.

The rules are enforced by the ASA and if an advertisement breaks the rules, it may be withdrawn. If the ASA ruling is not followed, there are numerous sanctions it can deploy, depending on circumstances such as the media type being used to deliver the advertisement. As well as reputational damage, non-compliance can also result in prosecution and the ASA can refer the company to other statutory enforcement bodies for the further action.  Prosecution can result in criminal liability, and the Trading Standards can impose unlimited fines, imprisonment, confiscation of financial assets, and suspension or revocation of a broadcasting licence. Ofcom can also impose fines, within its Regulatory Enforcement Guidelines, and withdraw a licence to broadcast.

Summary

The Guidance acknowledges the importance of advertising in facilitating the transition to more sustainable consumer behaviour and business practice. The ASA's stricter interpretation under the Codes and severe penalties for failure to comply will be important for meeting the UK's binding net zero targets.

With thanks to Dani Bass for her contributions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.